BRICS Plan to Abandon U.S. Dollar Will Hurt U.S. and Help Gold

Frustrated with what they viewed as being ignored by the West and not having a prominent role in institutions like the World Bank and the International Monetary Fund, Brazil, Russia, India, China and South Africa (also known as the BRICS countries) have held their second summit…[and declared war on the U.S. dollar. Let me explain.] Words: 572

So says Michael Lombardi (www.ProfitConfidential.com) in edited excerpts from his original article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has edited below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

Lombardi goes on to say, in part:

The BRICS countries represent 40% of the world’s population and 20% of the world’s gross domestic product (GDP)…[and] are growing their portion of world GDP faster than the West, which means that, even in a decade, the BRICS countries are going to represent a lot more than 20% of the world’s GDP.

The BRICS countries emerged from their meetings in New Delhi to declare that:

trade between their countries would take place in their own currencies, doing away with the use of the reserve U.S. dollar,

trade among the BRICS countries themselves would be increased in order to reduce the influence of exporting to countries in Europe and to the U.S. (Trade among the BRICS countries is growing at a 28% annual rate and is expected to double in just a few years from the $230 billion worth of trade being transacted today in the BRICS countries, increasing their GDP influence.)

their finance ministers would study the possibility of creating a BRICS development bank that would offer an alternative to the U.S.-dominated World Bank and report back with a proposal at next year’s summit. The proposed development bank would allow not only member BRICS countries to apply for loans for infrastructure projects and other development initiatives, but also all developing countries in the world.

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[If, and when] such a bank is created, it would need to be denominated in a reserve currency so that loans could be issued in that reserve currency to developing countries around the world…

There is no doubt that China wants its yuan to be that reserve currency… as China continues its quest to have the yuan become an international currency on par with the U.S. dollar and the euro.

Considering how culturally diverse the BRICS countries are, however, they may develop a new currency, which will still require that China significantly back it with its yuan.

[Given that] the BRICS countries represent the fastest growing countries in the world…[their collective] GDP number is rising rapidly and, as a consequence, so will the BRICS countries’ influence. The agreement to trade in their currencies and to create a BRICS development bank is a direct assault on the U.S. dollar…

Conclusion

[What the BRICS are planning] is not a good sign for the U.S. dollar longer-term, ensuring its decline and placing its reserve currency status in jeopardy.

As well, the possibility of China having its yuan as the reserve currency of choice among the BRICS countries or having the yuan back a new currency means that it will need more gold bullion to back its currency.

China has only a fraction of the gold bullion that Europe and the U.S. currently hold, pushing China to be an active and aggressive buyer in the gold bullion market today.

*http://www.profitconfidential.com/michaels-personal-notes/brics-countries-concentrated-effort-to-abandon-u-s-dollar-in-trade/ (To access the article please copy the URL and paste it into your browser.)

Editor’s Note: The above article has been has edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

Today, more than 60% of all foreign currency reserves in the world are in U.S. dollars – but there are big changes on the horizon…Some of the biggest economies on earth have been making agreements with each other to move away from using the U.S. dollar in international trade…[and this shift] is going to have massive implications for the U.S. economy. [Let me explain what is underway.] Words: 1583

Over the past few years, there have been many rumors about a coming global currency, but at times it has been difficult to pin down evidence that plans for such a currency are actually in the works but not anymore. A shocking new report by the IMF is proposing just that – a global currency beyond national control! Words: 820

A major portion of the U.S. dollar’s valuation stems from its lock on the oil industry and if it loses its position as the global reserve currency the value of the dollar will decline and gold will rise. Iran’s migration to a non-dollar based international trade system is the testing of the waters of a non-USD regime…transition to a world in which the U.S. Dollar suddenly finds itself irrelvant. [Let me explain.] Words: 1200

The EU has delivered on its threat to ban the import of crude oil from Iran, in response to its nuclear programme. The latest round of sanctions prohibits any new oil contracts, while allowing for existing deals to run until July but Tehran is apparently finding ways to keep business pumping. Reports say Iran will keep supplying one of its biggest customers – India – but will get payment in gold instead of dollars. Video* length: 02:37 minutes.

Conspiracy theory notwithstanding, claims that the reserve status of the U.S. dollar unfairly benefits the U.S. are no longer true. On the contrary, it has become a burden, both for America and the world. [Let me explain.] Words: 825

Yesterday, another brick was taken out of America’s dollar fundamentals. China and Russia have announced that they intend to stop using the U.S. dollar and begin to pay for trade between their two countries in renminbi and rubles, respectively, from now on. It begs the following question: Will the OPEC countries of the Middle East follow suit in abandoning the U.S. dollar? Words: 614

Those in the U.S. power structure know what the plan is if the U.S. dollar should fail. They are not admitting publically that there is even the remotest chance that it could happen but, rest assured, there is a plan. There is always a plan. To paraphrase Franklin Roosevelt, nothing happens by chance in government, so don’t be caught up in such a ‘surprise’ event – whatever it may be and whenever it occurs. Words: 1345

Within the recent retracement of the U.S. currency there has been endless speculation about the future role of the dollar as the world’s primary reserve currency. Moreover, there has even been conjecture that the dollar will no longer exist at some point in the near future but any case made for the vulnerability of the dollar falls short when it comes to naming alternatives. Words: 631

I came to the conclusion several years ago that it was just a matter of time before the world realized that the relative functionality of the U.S. dollar was about to go belly up – to collapse – and that that time happened to coincide with that fateful date all the prophecies are going crazy about – 2012! Words: 881

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